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Grasim Industries, an Aditya Birla Group company, reported 51 per cent increase in consolidated net profit in September quarter at ₹846 crore (₹562 crore) on the back of higher viscose staple fibre output and better realisation in cement business.
Net sales rose 3 per cent to ₹9,262 crore from ₹9,016 crore recorded in the same quarter last year. Other income rose 52 per cent to ₹312 crore, while finance cost fell 12 per cent to ₹167 crore, giving a boost to the company’s profitability.
Earnings before interest, taxes, depreciation and amortisation rose 29 per cent to ₹2,098 crore. Apart from increase in sales volume and better realisation, the company attributed the growth in profit to better sales mix, lower input cost and operating efficiencies.
Despite higher production, overall expenses were down at ₹8,020 crore (₹8,144 crore) largely due to lower cost.
Apart from increased volume and realisation, better sales mix and operating efficiencies also added to higher profitability. In the VSF business, overall sales volume grew by 9 per cent. With higher volume and realisation, revenue was up 21 per cent at ₹1,740 crore, while Ebitda jumped 75 per cent at ₹371 crore (₹211 crore). Sales volume of chemicals were up by eight per cent, mainly on additional volume from the Ganjam plant which was acquired in September last year. Ebitda was up by 26 per cent at ₹213 crore (₹169 crore).
Higher profit in UltraTech Cement, a subsidiary of Grasim, also added to the company's profitability.
Stable outlook In its sector outlook, Grasim said it expects stable outlook for the viscose staple fibre business and it will continue to focus on expanding the VSF market in India.
The company expects demand for caustic in India to grow with the rising demand from the end-user industry.
The commissioning of new capacities in the industry may increase supply in the medium term, it said. The government’s thrust on developing infrastructure spending, good monsoon, development of smart cities leading to growth in housing demand in tier-I and II cities augurs well for the cement industry. The slower pace of new capacity addition will lead to better industry utilisation, it said.
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